Do I Need To Have Car Insurance Before Buying A Car?

buying a car

Buying a new car is always a cause for celebration. Whether it’s your first car or you’re fifth, that new car smell never gets old. So if you’re planning to go car shopping soon, you’ll need to make sure that your ducks are all in a row. 

You might be wondering what you’ll need to buy a new car and drive your new wheels home. One question that’s sure to come up is whether or not you need to have car insurance before buying a car. 

To help you out, we’ve answered some common questions about insurance that new buyers face every day. 

Do I need to have insurance to drive the car off the lot?

All across America, drivers are required to insure their cars before driving them off the lot. Each state has its penalties for driving without insurance, so make sure you know what’s at stake.

If you don’t have an existing policy, don’t hesitate to shop around and compare prices beforehand. Although you want your car to be protected, you want to make sure you’ll still have money laying around to drive it.

For drivers who already have car insurance, their current policy will likely cover them when driving off the lot. Some car insurance policies cover the drive from the dealership to the house and give drivers a grace period to update their insurance. 

To put all these worries to bed, some drivers choose to update their insurance at the dealership over the phone. This can be done by providing your VIN and other details to your insurance company before leaving the dealership. 

Do car dealerships require proof of insurance?

The short answer is yes. Even if you’re not sure what vehicle you plan on purchasing, car dealerships will require you to have proof of insurance before you buy a car. In some cases, your insurance company will be required to fax your policy to the dealership. 

How do I get car insurance before I have a car?

If you’re 100% sure about the car you’ll be purchasing, it is possible to get your insurance policy squared away before you buy it. 

Ideally, you’ll want to purchase your car insurance several days before buying your new car. If you already know which car you want, then you can buy car insurance for that specific car. You might be in between cars, and that’s okay! You can use this time to check the various car models to see how the prices differ.

Be sure to mark the start date for coverage as the day you’ll be driving off the lot. You’ll be all set to hit the road in your new wheels, confident that you’re covered in case of an accident. 

However, you might stumble upon a deal you just can’t pass up at the dealership. If you find yourself needing immediate coverage, it is possible to buy instant car insurance at the dealership. 

Insurance companies will allow you to set up online or over the phone. Most will offer weekend hotlines for customers to call and set up policies, as many buyers are out shopping during this time. Whatever the case, purchasing your insurance before you buy your car is never a bad idea. 

What happens if I buy a new car before I have insurance?

Dealers will let you buy the car without proof of insurance, but they won’t let you drive it home. 

While it may sound counter-productive, some drivers have chosen to buy the car, leave it on the lot, then come back to pick it up when they have insurance.

If you have an existing policy, check to see what coverage your company offers you. If you’re unhappy with your current rates, use your new car to leverage your way into lower premiums with other companies. There are hundreds of insurance companies available, so shop around before making a final decision. 

How long do I have to get insurance when I buy a car?

It depends. Although you need insurance before you drive off the lot, it’s not as cut and dry if you’re trading up. If you’re trading in your car, you have up to 30 days to inform your insurance company about the switch. 

When buying a new car, it’s always important to reassess your insurance premiums. For instance, if you purchase a car full of safety features, you may see a drop in your premium. On the other hand, if you buy a luxury vehicle, your premiums may skyrocket and you may find yourself best off changing companies entirely. 

Can I get car insurance the same day I buy a car?

Yes, you can! Several insurance companies will sell you car insurance the same day you buy the car. It’s up to you to shop around and compare quotes to find the premium best suited for you. To set up your car insurance on the same day, you’ll need to provide the agent with all the pertinent information as soon as possible. 

If you plan to do it while you’re at the dealership, you’ll need to provide them with the following information:

  • Year, make, model & VIN
  • Name, address, date of birth, marital status & driver’s license number
  • Car’s mileage
  • Date of purchase
  • Name of the registered owner

There are a few factors that may prevent you from getting car insurance the same day you buy a car. If you’re missing the VIN or your driver’s license number, this will slow the process down significantly.

You may also have a hard time finding an insurance policy last minute if you have several violations or accidents on your record. Insurance companies will consider you a high-risk driver, and you’ll likely be hit with higher premiums.  

Purchasing the car of your dreams means nothing without the right insurance company to back you up. Before making any final decisions, compare car insurance quotes to make sure you’re getting the most out of your policy. Your new car (and wallet) will thank you.

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